<PAGE> PAGE 1
000 B000000 08/31/97
000 C000000 0000873803
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0
000 J000000 A
001 A000000 PAINEWEBBER INVESTMENT TRUST
001 B000000 811-6292
001 C000000 2127132000
002 A000000 1285 AVENUE OF THE AMERICAS
002 B000000 NY
002 C000000 NY
002 D010000 10019
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 Y
007 B000000 1
007 C010100 1
007 C010200 2
007 C010300 3
007 C020300 PAINEWEBBER TACTICAL ALLOCATION FUND
007 C030300 N
007 C010400 4
007 C010500 5
007 C010600 6
007 C010700 7
007 C010800 8
007 C010900 9
007 C011000 10
010 A00AA01 MITCHELL HUTCHINS ASSET MANAGEMENT INC
010 B00AA01 13219
010 C01AA01 NEW YORK
010 C02AA01 NY
010 C03AA01 10019
011 A00AA01 PAINEWEBBER INCORPORATED
011 B00AA01 8-16267
011 C01AA01 NEW YORK
011 C02AA01 NY
011 C03AA01 10019
012 A00AA01 PFPC, INC.
012 B00AA01 84-0000
012 C01AA01 WILMINGTON
012 C02AA01 DE
012 C03AA01 19809
013 A00AA01 ERNST & YOUNG LLP
013 B01AA01 NEW YORK
<PAGE> PAGE 2
013 B02AA01 NY
013 B03AA01 10019
014 A00AA01 PAINEWEBBER INCORPORATED
014 B00AA01 8-16267
018 00AA00 Y
019 A00AA00 Y
019 B00AA00 64
019 C00AA00 PAINEWEBBE
020 A000001 SMITH BARNEY
020 B000001 13-1912900
020 C000001 204
020 A000002 MORGAN STANLEY AND COMPANY, INC
020 B000002 13-2655998
020 C000002 4
020 A000003 PAINEWEBBER INC
020 B000003 13-2638166
020 C000003 2
020 A000004 MERRILL LYNCH PIERCE FENNER
020 B000004 13-5674085
020 C000004 0
020 A000005 LEHMAN BROTHERS INC
020 B000005 00-0000000
020 C000005 0
020 C000006 0
020 C000007 0
020 C000008 0
020 C000009 0
020 C000010 0
021 000000 211
022 A000001 STATE STREET BANK & TRUST
022 B000001 04-1867445
022 C000001 184072
022 D000001 89847
022 A000002 SMITH BARNEY INC
022 B000002 13-1912900
022 C000002 40192
022 D000002 1067
022 A000003 CITIBANK
022 B000003 00-0000000
022 C000003 16230
022 D000003 0
022 A000004 DRESDNER BANK
022 B000004 00-0000000
022 C000004 5111
022 D000004 0
022 A000005 DAIWA
022 B000005 13-5680329
022 C000005 4210
022 D000005 0
022 A000006 FIRST CHICAGO CAPITAL MARKETS
022 B000006 36-3595942
<PAGE> PAGE 3
022 C000006 3121
022 D000006 0
022 A000007 SALOMAN BROTHERS
022 B000007 13-3082694
022 C000007 2238
022 D000007 0
022 A000008 PAINEWEBBER INC
022 B000008 13-2638166
022 C000008 657
022 D000008 0
022 C000009 0
022 D000009 0
022 C000010 0
022 D000010 0
023 C000000 255882
023 D000000 91021
024 00AA00 N
025 D00AA01 0
025 D00AA02 0
025 D00AA03 0
025 D00AA04 0
025 D00AA05 0
025 D00AA06 0
025 D00AA07 0
025 D00AA08 0
026 A000000 N
026 B000000 N
026 C000000 N
026 D000000 Y
026 E000000 N
026 F000000 N
026 G010000 N
026 G020000 N
026 H000000 N
027 000000 Y
055 A00AA00 Y
055 B00AA00 N
056 00AA00 N
057 00AA00 N
058 A00AA00 N
059 00AA00 Y
060 A00AA00 Y
060 B00AA00 Y
061 00AA00 1000
077 A000000 Y
077 B000000 Y
077 C000000 N
077 D000000 N
077 E000000 N
077 F000000 N
077 G000000 N
<PAGE> PAGE 4
077 H000000 N
077 I000000 N
077 J000000 N
077 K000000 N
077 L000000 N
077 M000000 N
077 N000000 N
077 O000000 N
077 P000000 N
077 Q010000 Y
077 Q020000 N
077 Q030000 N
078 000000 N
080 A00AA00 ICI MUTUAL INSURANCE COMPANY
080 C00AA00 45000
081 A00AA00 Y
081 B00AA00 63
082 A00AA00 N
082 B00AA00 0
083 B00AA00 0
084 B00AA00 0
086 A010000 0
086 A020000 0
086 B010000 0
086 B020000 0
086 C010000 0
086 C020000 0
086 D010000 0
086 D020000 0
086 E010000 0
086 E020000 0
086 F010000 0
086 F020000 0
008 A000301 MITCHELL HUTCHINS ASSET MANAGEMENT INC.
008 B000301 A
008 C000301 801-13219
008 D010301 NEW YORK
008 D020301 NY
008 D030301 10019
015 A000301 STATE STREET BANK & TRUST COMPANY
015 B000301 C
015 C010301 NORTH QUINCY
015 C020301 MA
015 C030301 02171
015 E010301 X
028 A010300 47545
028 A020300 0
028 A030300 0
028 A040300 7728
028 B010300 35075
028 B020300 0
<PAGE> PAGE 5
028 B030300 0
028 B040300 7396
028 C010300 55355
028 C020300 0
028 C030300 0
028 C040300 12811
028 D010300 60345
028 D020300 0
028 D030300 0
028 D040300 12376
028 E010300 95590
028 E020300 0
028 E030300 0
028 E040300 12376
028 F010300 71006
028 F020300 0
028 F030300 0
028 F040300 17754
028 G010300 364916
028 G020300 0
028 G030300 0
028 G040300 70441
028 H000300 152159
029 000300 Y
030 A000300 2888
030 B000300 4.50
030 C000300 0.00
031 A000300 1860
031 B000300 0
032 000300 0
033 000300 1028
034 000300 Y
035 000300 270
036 A000300 N
036 B000300 0
037 000300 N
038 000300 0
039 000300 N
040 000300 Y
041 000300 Y
042 A000300 0
042 B000300 0
042 C000300 0
042 D000300 0
042 E000300 0
042 F000300 0
042 G000300 0
042 H000300 100
043 000300 2689
044 000300 0
045 000300 Y
<PAGE> PAGE 6
046 000300 N
047 000300 Y
048 000300 0.500
048 A010300 0
048 A020300 0.000
048 B010300 0
048 B020300 0.000
048 C010300 0
048 C020300 0.000
048 D010300 0
048 D020300 0.000
048 E010300 0
048 E020300 0.000
048 F010300 0
048 F020300 0.000
048 G010300 0
048 G020300 0.000
048 H010300 0
048 H020300 0.000
048 I010300 0
048 I020300 0.000
048 J010300 0
048 J020300 0.000
048 K010300 0
048 K020300 0.000
049 000300 N
050 000300 N
051 000300 N
052 000300 N
053 A000300 N
054 A000300 Y
054 B000300 N
054 C000300 N
054 D000300 N
054 E000300 N
054 F000300 N
054 G000300 Y
054 H000300 Y
054 I000300 N
054 J000300 Y
054 K000300 N
054 L000300 N
054 M000300 Y
054 N000300 N
054 O000300 N
062 A000300 N
062 B000300 0.0
062 C000300 0.0
062 D000300 0.0
062 E000300 0.0
062 F000300 0.0
<PAGE> PAGE 7
062 G000300 0.0
062 H000300 0.0
062 I000300 0.0
062 J000300 0.0
062 K000300 0.0
062 L000300 0.0
062 M000300 0.0
062 N000300 0.0
062 O000300 0.0
062 P000300 0.0
062 Q000300 0.0
062 R000300 0.0
063 A000300 0
063 B000300 0.0
066 A000300 Y
066 B000300 N
066 C000300 Y
066 D000300 N
066 E000300 N
066 F000300 N
066 G000300 N
067 000300 N
068 A000300 N
068 B000300 N
069 000300 Y
070 A010300 Y
070 A020300 Y
070 B010300 Y
070 B020300 N
070 C010300 Y
070 C020300 N
070 D010300 Y
070 D020300 N
070 E010300 Y
070 E020300 N
070 F010300 Y
070 F020300 N
070 G010300 Y
070 G020300 N
070 H010300 Y
070 H020300 N
070 I010300 N
070 I020300 N
070 J010300 N
070 J020300 N
070 K010300 Y
070 K020300 Y
070 L010300 Y
070 L020300 N
070 M010300 Y
070 M020300 N
<PAGE> PAGE 8
070 N010300 Y
070 N020300 Y
070 O010300 Y
070 O020300 Y
070 P010300 N
070 P020300 N
070 Q010300 N
070 Q020300 N
070 R010300 N
070 R020300 N
071 A000300 471739
071 B000300 22378
071 C000300 355423
071 D000300 6
072 A000300 12
072 B000300 31
072 C000300 6572
072 D000300 0
072 E000300 0
072 F000300 1756
072 G000300 0
072 H000300 0
072 I000300 255
072 J000300 213
072 K000300 45
072 L000300 94
072 M000300 16
072 N000300 50
072 O000300 0
072 P000300 67
072 Q000300 0
072 R000300 32
072 S000300 33
072 T000300 2689
072 U000300 45
072 V000300 0
072 W000300 10
072 X000300 5305
072 Y000300 0
072 Z000300 1298
072AA000300 6529
072BB000300 0
072CC010300 86241
072CC020300 0
072DD010300 334
072DD020300 383
072EE000300 955
073 A010300 0.0000
073 A020300 0.0000
073 B000300 0.0811
073 C000300 0.0000
<PAGE> PAGE 9
074 A000300 0
074 B000300 0
074 C000300 25514
074 D000300 0
074 E000300 0
074 F000300 680409
074 G000300 0
074 H000300 0
074 I000300 0
074 J000300 5655
074 K000300 0
074 L000300 1315
074 M000300 27
074 N000300 712920
074 O000300 3737
074 P000300 723
074 Q000300 0
074 R010300 0
074 R020300 0
074 R030300 0
074 R040300 28354
074 S000300 0
074 T000300 680106
074 U010300 7682
074 U020300 23000
074 V010300 0.00
074 V020300 0.00
074 W000300 0.0000
074 X000300 32459
074 Y000300 0
075 A000300 0
075 B000300 351229
076 000300 0.00
SIGNATURE PAUL SCHUBERT
TITLE TREASURER
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000873803
<NAME> PAINEWEBBER INVESTMENT TRUST
<SERIES>
<NUMBER> 3
<NAME> TACTICAL ALLOCATION FUND CLASS A
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 151400
<INVESTMENTS-AT-VALUE> 177241
<RECEIVABLES> 1750
<ASSETS-OTHER> 7
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 178998
<PAYABLE-FOR-SECURITIES> 938
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 7301
<TOTAL-LIABILITIES> 8239
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 143225
<SHARES-COMMON-STOCK> 7682
<SHARES-COMMON-PRIOR> 1458
<ACCUMULATED-NII-CURRENT> 272
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1421
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 25841
<NET-ASSETS> 170759
<DIVIDEND-INCOME> 1650
<INTEREST-INCOME> 8
<OTHER-INCOME> 0
<EXPENSES-NET> (870)
<NET-INVESTMENT-INCOME> 788
<REALIZED-GAINS-CURRENT> 1639
<APPREC-INCREASE-CURRENT> 21653
<NET-CHANGE-FROM-OPS> 24080
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (334)
<DISTRIBUTIONS-OF-GAINS> (200)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8395
<NUMBER-OF-SHARES-REDEEMED> (2196)
<SHARES-REINVESTED> 25
<NET-CHANGE-IN-ASSETS> 135877
<ACCUMULATED-NII-PRIOR> 18
<ACCUMULATED-GAINS-PRIOR> 69
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 441
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 870
<AVERAGE-NET-ASSETS> 85527
<PER-SHARE-NAV-BEGIN> 16.15
<PER-SHARE-NII> 0.18
<PER-SHARE-GAIN-APPREC> 6.12
<PER-SHARE-DIVIDEND> (0.14)
<PER-SHARE-DISTRIBUTIONS> (0.08)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 22.23
<EXPENSE-RATIO> 0.99
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000873803
<NAME> PAINEWEBBER INVESTMENT TRUST
<SERIES>
<NUMBER> 3
<NAME> TACTICAL ALLOCATION FUND CLASS B
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 212645
<INVESTMENTS-AT-VALUE> 248940
<RECEIVABLES> 2458
<ASSETS-OTHER> 10
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 251408
<PAYABLE-FOR-SECURITIES> 1318
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 10254
<TOTAL-LIABILITIES> 11572
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 201163
<SHARES-COMMON-STOCK> 10860
<SHARES-COMMON-PRIOR> 1767
<ACCUMULATED-NII-CURRENT> 383
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1995
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 36295
<NET-ASSETS> 239836
<DIVIDEND-INCOME> 2318
<INTEREST-INCOME> 11
<OTHER-INCOME> 0
<EXPENSES-NET> (1994)
<NET-INVESTMENT-INCOME> 335
<REALIZED-GAINS-CURRENT> 2302
<APPREC-INCREASE-CURRENT> 30412
<NET-CHANGE-FROM-OPS> 33049
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (260)
<DISTRIBUTIONS-OF-GAINS> (240)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10195
<NUMBER-OF-SHARES-REDEEMED> (1127)
<SHARES-REINVESTED> 25
<NET-CHANGE-IN-ASSETS> 191091
<ACCUMULATED-NII-PRIOR> 22
<ACCUMULATED-GAINS-PRIOR> 83
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 619
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1994
<AVERAGE-NET-ASSETS> 107196
<PER-SHARE-NAV-BEGIN> 16.13
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> 6.09
<PER-SHARE-DIVIDEND> (0.09)
<PER-SHARE-DISTRIBUTIONS> (0.08)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 22.08
<EXPENSE-RATIO> 1.74
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000873803
<NAME> PAINEWEBBER INVESTMENT TRUST
<SERIES>
<NUMBER> 3
<NAME> TACTICAL ALLOCATION CLASS C
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 206623
<INVESTMENTS-AT-VALUE> 241890
<RECEIVABLES> 2388
<ASSETS-OTHER> 10
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 244288
<PAYABLE-FOR-SECURITIES> 1281
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9964
<TOTAL-LIABILITIES> 11245
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 195465
<SHARES-COMMON-STOCK> 10507
<SHARES-COMMON-PRIOR> 4569
<ACCUMULATED-NII-CURRENT> 372
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1939
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 35267
<NET-ASSETS> 233043
<DIVIDEND-INCOME> 2252
<INTEREST-INCOME> 11
<OTHER-INCOME> 0
<EXPENSES-NET> (2300)
<NET-INVESTMENT-INCOME> (37)
<REALIZED-GAINS-CURRENT> 2237
<APPREC-INCREASE-CURRENT> 29551
<NET-CHANGE-FROM-OPS> 31751
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (4)
<DISTRIBUTIONS-OF-GAINS> (451)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7474
<NUMBER-OF-SHARES-REDEEMED> (1560)
<SHARES-REINVESTED> 24
<NET-CHANGE-IN-ASSETS> 185710
<ACCUMULATED-NII-PRIOR> 56
<ACCUMULATED-GAINS-PRIOR> 215
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 602
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2300
<AVERAGE-NET-ASSETS> 140369
<PER-SHARE-NAV-BEGIN> 16.12
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> 6.11
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.08)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 22.18
<EXPENSE-RATIO> 1.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000873803
<NAME> PAINEWEBBER INVESTMENT TRUST
<SERIES>
<NUMBER> 3
<NAME> TACTICAL ALLOCATION CLASS Y
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 32333
<INVESTMENTS-AT-VALUE> 37852
<RECEIVABLES> 374
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 38227
<PAYABLE-FOR-SECURITIES> 200
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1559
<TOTAL-LIABILITIES> 1759
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 30587
<SHARES-COMMON-STOCK> 1633
<SHARES-COMMON-PRIOR> 790
<ACCUMULATED-NII-CURRENT> 58
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 304
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5519
<NET-ASSETS> 36468
<DIVIDEND-INCOME> 352
<INTEREST-INCOME> 2
<OTHER-INCOME> 0
<EXPENSES-NET> (140)
<NET-INVESTMENT-INCOME> 214
<REALIZED-GAINS-CURRENT> 350
<APPREC-INCREASE-CURRENT> 4624
<NET-CHANGE-FROM-OPS> 5188
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (118)
<DISTRIBUTIONS-OF-GAINS> (64)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1018
<NUMBER-OF-SHARES-REDEEMED> (185)
<SHARES-REINVESTED> 10
<NET-CHANGE-IN-ASSETS> 28949
<ACCUMULATED-NII-PRIOR> 10
<ACCUMULATED-GAINS-PRIOR> 37
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 94
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 140
<AVERAGE-NET-ASSETS> 18137
<PER-SHARE-NAV-BEGIN> 16.20
<PER-SHARE-NII> 0.23
<PER-SHARE-GAIN-APPREC> 6.13
<PER-SHARE-DIVIDEND> (0.15)
<PER-SHARE-DISTRIBUTIONS> (0.08)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 22.33
<EXPENSE-RATIO> 0.74
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
Report of Independent Auditors
To the Shareholders and Board of Trustees of
PaineWebber Tactical Allocation Fund
In planning and performing our audit of the financial statements of
PaineWebber Tactical Allocation Fund for the year ended August 31, 1997,
we considered its internal control, including control activities for
safeguarding securities, in order to determine our auditing procedures for
the purpose of expressing our opinion on the financial statements and to
comply with the requirements of Form N-SAR, not to provide assurance on
the internal control.
The management of PaineWebber Tactical Allocation Fund is responsible for
establishing and maintaining internal control. In fulfilling this
responsibility, estimates and judgments by management are required to assess
the expected benefits and related costs of controls. Generally, controls that
are relevant to an audit pertain to the entity's objective of preparing
financial statements for external purposes that are fairly presented in
conformity with generally accepted accounting principles. Those controls
include the safeguarding of assets against unauthorized acquisition, use
or disposition.
Because of inherent limitations in internal control, errors or irregularities
may occur and not be detected. Also, projection of any evaluation of internal
control to future periods is subject to the risk that it may become inadequate
because of changes in conditions or that the effectiveness of the design and
operation may deteriorate.
Our consideration of the internal control would not necessarily disclose all
matters in the internal control that might be material weaknesses under
standards established by the American Institute of Certified Public
Accountants. A material weakness is a condition in which the design or
operation of one or more of the internal control components does not reduce
to a relatively low level the risk that errors or irregularities in amounts
that would be material in relation to the financial statements being audited
may occur and not be detected within a timely period by employees in the
normal course of performing their assigned functions. However, we noted no
matters involving the internal control and its operation, including controls
for safeguarding securities, that we consider to be material weaknesses as
defined above at August 31, 1997.
This report is intended solely for the information and use of the shareholders,
board of trustees and management of PaineWebber Tactical Allocation Fund and
the Securities and Exchange Commission.
ERNST & YOUNG LLP
New York, New York
October 14, 1997
